'Tis the Season for Overspending

‘Tis the season for dancing sugarplums, gingerbread men and…debt? Without a proper plan in place, you can easily find yourself in debt come January. Money Mentors counsellor, Brian Betz, shared his tips to help you not overspend this holiday season and truly enjoy all that this season has to offer. Take a look at our Alberta Primetime segment below!

Full transcription:

When is the right time to start financially planning for the holidays?

The ideal scenario is January 15th! You’ve had a great Christmas, you’re past shopping for Christmas gift, decorations, etc., you’ve figured out exactly how much you’ve spent for this holiday season (including―but not limited to―alcohol, entertaining, travel). Divide that total by 12 and you’ve got yourself a monthly savings goal to help you out next holiday season.

The last thing that we want to see happen is you don’t have a plan and you go into the holiday season unprepared. You start putting things onto your credit card, which don’t get paid off in January. We see a lot of people who are still paying off Christmases from years and years ago. It just continues to keep piling on because they didn’t have a plan to begin with.

And a big chunk of that for a lot of people is the gift giving. The list can be so long for a lot of people, if they let it get that way.

I think it’s important that as the demographics in your family or social circle change, you need to be on the look out for ways to make changes to that. Just because you bought a gift for your nephew when he was 12 years old―well, he’s 24 now and you don’t necessarily have to keep buying for him. Have some conversations with your family and friends about whether or not you’re still going to buy gifts for each other and if you should implement spending limits, etc. Because I would rather see you spending time away from the mall and those crazy parking lots and instead spend that time with family and loved ones doing things. That, to me, is what Christmas is all about.

You don’t always have to buy something material, right? You can give the gift of time.

Exactly. For example, you can shovel your neighbour’s walkway, spend one-on-one time with your grandma, babysit your brother’s kids. The options are endless. And another option that can be great is to make gifts. Whether you’re a baker, a chef, a sewer, a woodworker―people love homemade gifts. And if you’re like me, most people can just go out now and buy what they want anyways. So getting a gift that someone made especially for me is very important and more meaningful.

There are so many other things to think about during the holiday season, like you said―beverages, food, hosting and attending events, decorations. How can we adjust our living budgets now to start saving for all of that?

It’s important to know what you’ve spent in the past so you can live within your means and put money aside for that. You don’t have to do it in January. You can do it now. But you want to go into the holiday season knowing what you can afford to spend so it doesn’t go on the credit card and not get paid off. If you’re travelling, maybe you’ll want to pull extra money from some other part of your budget to accommodate that.

Another great way to do this is to stick to cash only. If you put money aside in an envelope and everything you spend at Christmastime comes out of that, you’re going to know very quickly when you’ve run out of money. And frankly, it’s a lot more painful to pay with cash than it is to just punch in a PIN.